A Salute to Union Square: Commercial strength leads to new investments

A new Mount Sinai Downtown Beth Israel mini-hospital at Second Ave. between 13th and 14th Sts. will anchor the eastern end of the Union Square Partnership business improvement district. Over all, the district is experiencing a very low commercial vacancy rate. Courtesy Mount Sinai Downtown

As a growing hub of food, technology, culture and cutting-edge businesses, Union Square is one of Manhattan’s most dynamic districts, with more than $450 million in new investment flowing into the neighborhood for site acquisition and development in the last year alone.

“We’ve seen a flurry of activity as businesses are lining up to locate in Union Square,” said Jennifer Falk, executive director of the Union Square Partnership. “The area’s unparalleled transportation access and its vibrant mix of shops, restaurants, fitness studios and other amenities around Union Square Park, has been a magnet for job growth and innovative retail concepts. New companies continually tell us they are drawn to the area’s vibrant community and creative culture that helps them retain talent in a highly competitive market.”

The past year has seen countless reports of major commercial tenants securing new office space in Union Square. Last month, Discovery Communications — fresh from its $12 billion acquisition of Scripps — announced its move into 250,000 square feet of space at 230 Park Ave. South, a TF Cornerstone property on 19th St. News reports highlighted that Discovery selected Union Square over sites in Midtown and in Hudson Yards. In the same building, e-commerce mattress purveyor Casper also signed a lease for nearly 32,000 square feet.

Union Square’s very own Danny Meyer recently reaffirmed his commitment to the neighborhood by signing a new, 15,000-square-foot lease for Union Square Hospitality Group, just a few blocks away from their current office space, at 853 Broadway, which is owned by the Feil Organization. Additionally, Clarifal, an artificial intelligence company, has just leased 17,555 square feet at 215 Park Ave. South.

The strength of the neighborhood’s economy has spurred new development initiatives, like the forthcoming $250 million Union Square Tech Training Center poised to rise at 124 E. 14th St.

The new 21-story center, dubbed the “Tech Hub,” is designed to expand tech training and career development to neighborhood residents that are currently underrepresented in the tech economy, and take advantage of the neighborhood’s proliferation of new jobs. Programs at the center will be run by Civic Hall, a nonprofit organization with a proven track record of increasing access to tech jobs in New York City.

“With its history and also as the center of New York’s burgeoning innovation community, Union Square is the perfect location for a new 21st-century civic institution,” said Andrew Rasiej, founder and C.E.O. of Civic Hall. “When Civic Hall opens at the tech center, it will provide any New Yorker regardless of age, color, gender, economic ability or background, with digital-skills training and access to the jobs of the future. And it will contribute to Union Square’s proud and continuing status as the apex of New York City’s civic life.”

On the district’s east side, Mount Sinai Downtown is set to build a new facility on Second Ave. between 13th and 14th Sts. The 70-bed mini-hospital will stand adjacent to the existing New York Eye and Ear Infirmary, which will continue to see patients during construction and get upgrades of its own.

“Over the next four years, we will be transforming Mount Sinai Beth Israel in major ways by expanding access, improving quality and preserving jobs for the Downtown community,” said Dr. Jeremy Boal, who serves as chief clinical officer of Mount Sinai Health System and president of Mount Sinai Downtown.

On the district’s west side, Extell Development purchased four adjacent buildings at 14th St. and Sixth Ave. Industry observers say the site could accommodate some 126,000 square feet of new residential space. Across the street, developer Gemini Rosemont is seeking permission to build a 13-floor, 45-unit condo project at 101 W. 14th St.; if green-lighted, the project would open in 2020. These two projects alone will lead to a complete transformation of the intersection of 14th St. and Sixth Ave.

In an effort to maintain the neighborhood’s street-level vibrancy amidst all this new investment, the Union Square Partnership continues to market retail opportunities and has driven the storefront vacancy rate down to an enviable 2.7 percent.

More than 50 new businesses opened their doors in Union Square over the last year. Noteworthy openings include the first permanent Kellogg’s Café, at 31 E. 17th St.; Boucherie, at 225 Park Ave. South; UNTUCKit, at 103 Fifth Ave.; Spiderbands Fitness, at 12 E. 14th St.; the national Frye apparel brand, at 144 Fifth Ave.; and the American Eagle / AE Studio, at 19 Union Square West.

Retail is expected to benefit from the changing pedestrian activity that would result from the 15-month closure of the L train. The shutdown, planned to start in April 2019, would affect Union Square and 14th St. more heavily than almost any community citywide. While transit would be disrupted and various mitigation measures would be required, it’s expected the closure would add 50,000 pedestrians along the street that would otherwise travel underground to make a transfer at Union Square station. This new foot traffic would be a boon to retailers along the corridor.

“While we understand the L train closure will put unprecedented strain on our neighborhood, we are encouraged by the strong demand for the retail opportunities within our district,” Falk said. “More companies are investing in Union Square than ever before. There’s never been a better time to set up shop in Union Square.”

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